[@Cyclone]

I do agree that, if fraying is indeed a negligible factor most of the time, complexity would not be much of a problem, and many of my concerns about it are alleviated. However, it still seems to me (do correct me if I'm mistaken) that it would have a fairly significant negative impact on a number of the setting's features.

Take, for example, undead. Even if it only manifests after a very extended timespan soul decay would inevitably affect all of them, as there is no apparent limit to their permanence in that state. The length of that timespan is ultimately immaterial, given the roleplay revolves around immortal characters who operate over entire epochs of the world; sooner or later, we would reach its end. This could only be avoided if  were truly extremely great, but, if taken too far, the whole notion would at length be rendered entirely irrelevant to all purposes. Having all undead be condemned to degrade into mindless husks would heavily impair the relevance of undeath as a divine aspect, or at least greatly limit the possible ways in which it could be explored and developed.

Another concept that has been mentioned various times is the possibility of competing afterlives. Beyond having plenty of plot potential in itself, something like this could give a whole new dimension to an eventual soul crisis arc, making it a much more personal matter for any gods who engaged in it. However, once again this would be stymied if all souls were destined to crumble regardless of what happened to them. A variety of afterlives is meaningless if all their inhabitants are featureless shells without thought or memory. Remedying this by making them impermanent would somewhat defeat the concept of an afterlife proper.

Overall, I believe the case remains that soul decay could inhibit several interesting plot opportunities while - I feel the need to restate this - contributing very little in return (its usefulness for demons is ambiguous at best if it is such a small factor, although I admit I did not entirely follow the deliberations on that, and even the ethical aspect it adds to Katharsos' work appears very minor compared to the otherwise cosmic significance of his duties). If I am inflating things out of their real proportion or if there are solutions to these issues, though, do disregard my ramblings.